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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 14897 / May 1, 1996
IN RE ROBERT N. TAYLOR, United States District Court for the
District of Columbia, Misc. No. 96-149 (TFH).
On May 1, 1996, the United States Attorney for the District
of Columbia commenced criminal contempt proceedings in the United
States District Court for the District of Columbia against Robert
N. Taylor. The Government alleges that Taylor willfully and
flagrantly violated an asset freeze order and other orders
entered in a separate civil securities enforcement action brought
by the Commission against Taylor and the Better Life Club of
America, Inc., a corporation founded and controlled by Taylor.
Securities and Exchange Commission v. The Better Life Club of
America, Inc., and Robert N. Taylor, Civil Action No. 95-1679
(TFH) (D.D.C.). The contempt proceedings have been assigned to
United States District Judge Thomas F. Hogan, who also presides
over the Commission's related enforcement action. Upon
conviction of the contempt charge, Taylor would face up to six
months' imprisonment or a fine of up to $5,000.
In the contempt proceedings, the Government alleges:
Beginning moments after the freeze order was entered in the
Commission's action on September 1, 1995, and continuing for a
period of seven months, Taylor used concealed bank accounts to
engage in at least 232 prohibited banking transactions, including
$246,000 in withdrawals and $344,000 in deposits. The deposits
included at least 172 investor checks totaling over $188,000,
which Taylor failed to turn over to the SEC or the court-
appointed special administrator as directed by Judge Hogan. In
addition, Taylor failed to disclose at least 15 bank accounts
when ordered to do so by the Court, and went on to open -- and
conceal -- six new accounts, in further violation of Judge
Hogan's orders.
In the underlying civil enforcement action, the Commission
alleges that Taylor and the Better Life Club operated a $47
million Ponzi scheme in violation of the antifraud and
registration requirements of the federal securities laws.
According to the Commission's complaint, defendants promised to
double investors' money in 60 or 90 days allegedly through
investments in advertising for the Club's "900" telephone numbers
and other profitable businesses, when in fact defendants used the
investors' funds almost exclusively to pay off earlier investors
and to enrich Taylor, his children, and his live-in companion.
The scheme was halted by the Court pending a final determination
of the Commission's action. See SEC Lit. Rel. No. 14624 (Sept.
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5, 1995).